Summary of advice for redundancy, lay-off and pay cuts.

Updated 3 June 2020

Can I lay my staff off if I need to reduce costs quickly?

The government has introduced the Coronavirus Job Retention Scheme to help employers try and avoid this. However, if still absolutely necessary due to cash shortages that cannot be temporarily resolved then this is still an option. There is other support available for businesses with cash flow problems due to the business interruption - for full details, eligibility and how to access these please CLICK HERE.

If you have a lay-off and/or short-time working clause in your employees’ contracts of employment then these can be invoked with immediate effect. There is no requirement to provide notice.

Lay-off is where you inform staff there is no work available and they should not attend work. The clause should refer to the employees’ entitlement to pay ceasing on workless days. Instead employees may be entitled to a statutory guaranteed payment (currently £29 per day) for the first 5 days of lay-off. There is no time limit to the length of lay-off, however after 4 consecutive weeks’ of lay off, or a total of 6 weeks of lay off in a 13 week period, an employee is entitled to treat themselves as redundant and claim a redundancy payment if they have been employed for at least two years.

If you have no lay-off clause staff may still be told not to come into work but the obligation to pay them their contractual pay continues.

Short-time working means you can reduce employees’ hours and pay accordingly.

How do I make staff redundant if I have to?

It is a requirement in law to follow a fair process to terminate employment because of redundancy. What is required will depend on the specific circumstances of your staff including criteria such as length of service, jobs, number of employees affected, and particularly the circumstances you are facing. Please contact us to discuss further if needed.

Can I ask my employees to take a pay-cut or work for no pay?

Any changes to fundamental terms and conditions of employment, such as reducing pay, has to be by mutual agreement. It is acceptable to ask employees if they would be willing to take a reduction in pay to help the business through a difficult period. If this is something you want to consider doing please contact us for guidance.

Should I be making my staff homeworkers if I can?

The government’s advice is that people should work from home if they can, to reduce social interaction. If you decide this is practical in your situation then this can be temporarily introduced – our advice is to carefully think through the implications including:

  • Have a clear homeworking policy in place – contact us for this

  • Homeworkers need to complete a risk assessment – contact us for a template

  • Consider IT arrangements – our sister company HJS Technology can assist with all requirements

  • Make suitable supervisory and contact arrangements to maintain work motivation and productivity

Read the other Managing Staff Matters summaries via the links below:

If you have any other questions please do get in touch with our team on 01722 325833 or email

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